Excerpts from the OIG Audit Report On USPS Overtime Workhours:

This report presents the results of our self-initiated audit of Postal Service Function 4 Overtime Workhours (Project Number 09RG009MS000). Our objective was to determine whether Postal Service officials effectively managed Function 4 workhours to reduce overtime costs. This audit addresses financial and operational risk.

Footnote:  Function 4 operations include customer service activities – both supervisory and nonsupervisory – of employees at post offices, stations, and branches involved in automated, mechanized, manual, and post office box distribution of mail, post office window, and vending equipment services and miscellaneous administrative and Central Forwarding System operations

Postal Service officials effectively managed Function 4 workhours to reduce overtime costs. Overall Function 4 overtime workhours decreased from 17.5 million in fiscal year
(FY) 2008 to 9.2 million in FY 2009. However, unauthorized overtime workhours as a percentage of total overtime workhours increased from FY 2008 to FY 2009.
Management should strengthen time and attendance procedures to reduce Function 4 unauthorized overtime costs. We estimated that in FYs 2008 and 2009, the Postal
Service incurred unrecoverable unsupported questioned costs totaling $79.6 million for unauthorized overtime workhours.

Time and Attendance Procedures Need Strengthening

Some Function 4 employees clocked in before and clocked out after their assigned workhours, resulting in 1.2 million and 965,000 unauthorized overtime workhours for FYs 2008 and 2009, respectively. This occurred because the Postal Service’s badge control process does not prevent employees from clocking in before and clocking out after their assigned workhours. In addition, managers and supervisors did not follow established time and attendance procedures. Officials stated they did not follow procedures because other duties took priority. Specifically, they did not always:

• Control employees’ access to time cards and badges to ensure they clocked in and out according to their assigned schedules;
• Update the Time and Attendance Collection System (TACS) to reflect changes in employees’ scheduled work times; and
• Record authorized overtime in TACS to reduce the amount of unauthorized overtime recorded in the TACS Unauthorized Overtime Report.

We previously recommended the vice president, controller, assess the feasibility of automating the badge control process with the Electronic Badge Reader (EBR) and TACS to prevent employees from clocking in before their official workhours begin.

Although management identified two automated solutions to prevent employees from clocking in before and clocking out after their assigned workhours, they decided against
these options in favor of using the TACS reports to identify employees clocking in before normal workhours. Management indicated that the reports were sufficient to
effectively and efficiently manage clocking activity.

We interviewed 13 finance managers from high-performing district offices in the Eastern and Pacific Areas to determine the reasons for their success in controlling unauthorized
workhours and to develop best practices. Districts in the Eastern and Pacific Areas incurred the fewest Function 4 unauthorized overtime workhours in FYs 2008 and 2009.
These districts were successful in controlling unauthorized workhours because their managers and supervisors substantially complied with established time and attendance
procedures. The districts provided their managers and supervisors training on time and attendance procedures, provided overtime reports for them to use to manage
workhours, and held frequent meetings to discuss overtime workhours.

See the Full OIG Audit Report (PDF)